Hanon sells up flagship software

Hanon Solutions has sold the rights to its flagship integration software after struggling to break into the Scottish public sector market.

The Glasgow-based company, which is chaired by high-profile businessman Gavin Gemmell, had developed technology that could, among other things, join up educational and social services records to identify and track children at risk.

Hanon had won a number of contracts in local authorities in England, raising its revenues to £1 million this year – but has now sold its public sector business to London-based OLM for “a substantial sum”. Hanon’s technical director, David Rivett, and other staff will be absorbed into OLM.

David Fraser, chief executive of Hanon, said: “We’ve chosen to transfer the public sector business to OLM because they can exploit it better .”

OLM, which employs 140 people and has annual turnover of £14m, supplies software to 70 local authorities in the UK, including Glasgow City Council.

Hanon executives said that they had great difficulty breaking into the Scottish public sector, which tended to buy from larger companies.

Fraser said: “We would like a public sector that had a greater openness and willingness to share some of the risks of developing a knowledge economy on the buying side. At the moment, all the risk is being taken on the investment side [through Scottish Enterprise and Executive investment or grant schemes].”

Shareholders in Hanon – including Archangel Informal Investments, Gemmell and company directors – have retained the rights to sell the software into the private sector market. Fraser will lead a new company to pursue the financial services, retail and manufacturing sectors. The product, for instance, could be used to provide an integrated view of sales information from a company’s subsidiaries in real time.

The system is already being used by computer company Unisys in the United States. It is hoped that if OLM is successful with the software in the public sector, this will serve to attract business from large corporations .

As part of the deal, OLM will take a share in revenues from the new company.

Julia Fields. Sunday Herald 21st Nov 2004